Identify his/her entrepreneurial qualities and support your answer based on what you have observed

Consider four different stocks, all of which have a required return of 14 percent and a most recent dividend of $3.50 per share.

nlexa [21]

Answer:

Stock W 3.64%

Stock X 14.00%

Stock Y 21.28%

Stock Z 1.56%

Explanation:

We calculate the horizon value for each one. This will provide us with their price and with that, we solve for dividends yield

Stock W - Horizon Value

3.50 x 1.10 3.85

----------------- = ----------- = 96.25

0.14 - 0.10 0.04

Dividend yield: 3.50 / 96.25 = 0.036363636 = 3.64%

Stock X: g= 0

3.5 / 0.14 = 25

3.5 / 25 = 0.14

Stock Y g = -0.06

3.50 x (1 - 0.06) / (0.14 - (-0.06)) = 16.45

Dividend yield 3.50 / 16.45 = 0,212765957 = 21.28%

Stock Z

$\left[\begin{array}{ccc}#&Dividends&Discounted\\&3.5&\\1&4.2&3.68\\2&5.04&3.88\\2&5.6448&217.17\\&TOTAL&224.73\\\end{array}\right]$

First we solve for the next two dividends:

next year 3.50 x (1 + 20%) = 4.2

second year 4.20 x (1 + 20%) = 5.04

Here we solve for the horizon value of the constant grow:

5.04 x 1.12 / (0.14 - 0.12) = 282.24

now, we solve for the Present value of each one and add them together.

Getting a value of $224.73

We now solve for dividend yield: 3.50 / 224.73 = 0,01557 = 1.56%

6 0

4 years ago

Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,00

sveticcg [70]

Answer:

$193,000

Explanation:

Carter Company

Sales 4,525,000

Cost of goods sold <u>-2,550,000</u>

1,975,000

Operating expenses <u>-1,372,000</u>

Net Income 603,000

Average invested assets 4,100,000

Target income 10% 410,000 <u>410,000</u>

Residual income <u>$193,000</u>

5 0

4 years ago

Grande communications offers a lower price to customers who subscribe to grande television, telephone, and internet services all

Marizza181 [45]

Grande communications offers a lower price to customers who subscribe to Grande television, telephone, and internet services all at once. This is an example of price bundling.

Price bundling is a pricing strategy where companies package separate products together and offer them at a single typically lower price in order for higher sales and profit.

Price bundling is very common these days as it is seen that these days there are various companies who sell two products together at a lower price than the sum of the individual price of each product. Thus, by this they sell two products and make their sales.

Hence, Grande communications offers a lower price to customers whoever subscribes to Grande television, telephone, and internet services all at once.

To learn more about Price bundling here:

brainly.com/question/23175408

#SPJ4

8 0

2 years ago

Steve is preparing a comparative market analysis for the Joneses and has selected three comparable properties. How many adjustme

Fynjy0 [20]

The number of adjustments that Steve has to make for Jones's property is 0.

<h3>What is a comparative market analysis?</h3>

The comparative market analysis is the term that is used to refer to the estimate of the value of a person's home which is based on all of the other homes that are similar homes in the area.

The adjustments that have to be made to a property is going to be 0 based on the property.

Read more on market analysis here:

brainly.com/question/17246850

#SPJ1

3 0

2 years ago

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $940,000,

Tanya [424]

Answer:

a. Year 0 Net Cash Flows = $984,000

b. We have:

Year 1 net operating cash flows = $306,159

Year 2 net operating cash flows = $332,986

Year 3 net operating cash flows = $261,479

c. Additional Year 3- cash flow = $504,877

d. The machine should be purchased.

Explanation:

We start by first calculating the following:

Initial Investment = Base Price + Modification Cost = $940,000 + $25,000 = $965,000

Useful Life = 3 years

Depreciation in Year 1 = 0.3333 * $965,000 = $321,634.50

Depreciation in Year 2 = 0.4445 * $965,000 = $428,942.50

Depreciation in Year 3 = 0.1481 * $965,000 = $142,916.50

Book Value at the end of Year 3 = $965,000 - $321,634.50 - $428,942.50 - $142,916.50 = $71,506.50

After-tax Salvage Value = Salvage Value - (Salvage Value - Book Value) * Marginal tax rate = $624,000 – ($624,000 - $71,506.50) * 25% = $485,877

Initial Investment in NWC = $19,000

We can now proceed as follows:

a. What is the Year 0 net cash flow?

Year 0 Net Cash Flows = Initial Investment + Initial Investment in NWC = $965,000 + $19,000 = $984,000

b. What are the net operating cash flows in Years 1, 2, 3?

Year 1 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 1) = ($301,000 * (1 – 0.25)) + (0.25 * $321,634.50) = $306,159

Year 2 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 2) = ($301,000 * (1 – 0.25)) + (0.25 * $428,942.50) = $332,986

Year 3 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 3) = ($301,000 * (1 – 0.25)) + (0.25 * $142,916.50) = $261,479

c. What is the additional Year 3- cash flow (i.e. after tax salvage and the return of working capital)?

Additional Year 3- cash flow = NWC recovered + After-tax Salvage Value = $19,000 + $485,877 = $504,877

d. If the project's cost of capital is 12%, should the machine be purchased?

This can be determined from the net present value (NPV) calculated as follows:

NPV = -$984,000 + ($306,159/1.12^1) + ($332,986/1.12^2) + ($261,479/1.12^3) + ($504,877/1.12^3) = $100,287.71

Since the NPV of the machine of $100,287.71 is positive, the machine should be purchased.

7 0

3 years ago